Unholy Trinity: Labor, Capital and Land in the New Economy (Graz Schumpeter Lectures)
Duncan K. Foley
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Many of the central results of Classical and Marxian political economy are examples of the self-organization of the capitalist economy as a complex, adaptive system far from equilibrium.
An Unholy Trinity explores the relations between contemporary complex systems theory and classical political economy, and applies the methods it develops to the problems of induced technical change and income distribution in capitalist economies, the control of environmental externalities such as global warming and the stabilization of the world population.
The arguments and methods of this important book address central problems both of economic science and economic policy and provide fresh paths for theoretical exploration.
appropriate place in a synthetic understanding of wage dynamics is critical to forwarding Classical and Marxian positions. The Goodwin model In analytical terms the most elegant expression of these dynamics in the Classical/Marxian literature is Richard Goodwin’s model of the capitalist labor market (Goodwin, 1967). Denoting employment by N and the potential labor force by L, Goodwin assumes that the rate of change in the wage per worker, w, will be proportional to the excess of the employment
equally consistently regard the ﬁrm as aggregating all of the labor inputs into one wage budget, and all of the means of production into one capital budget, and considering the cost consequences of altering the proportions of its spending at this level. Since the ﬁrm takes input prices of both labor and intermediate inputs as independent of its decision, input prices are a natural aggregator of costs. 52 Innovative capitalism and the distribution of income In fact, the ﬁrm could be regarded
methods of the Classical political economists, a vein considerably enriched by the immense profusion of data contemporary economists have to work with. The theory of complex systems provides the larger framework within which these methods can be employed, and which explains their stunning effectiveness. 5 Concluding observations What are the advantages of regarding capitalist economies as complex, adaptive, self-organizing systems typically far from equilibrium? First, we can dispense with
like the economy without hypostatizing them as realized equilibrium states. Self-organization and equilibrium In some cases it is possible to study the self-organizing tendency of the economy in terms of homeostatic feedback mechanisms that can be represented by differential equations. For example, it is not hard to represent Malthus’ theory of demographic equilibrium in a two-dimensional system of equations involving population and the standard of living, linked by a fertility-mortality
methodological problem creates a gap between those who, in the name of scientiﬁc skepticism and conservatism, accept results only in the domain in which they have been demonstrated, and those who, in the search for insight and understanding, want to project or generalize results demonstrated in a narrow domain to a wider domain on the basis of intuition or instinct. This division, which characterizes the dialectic of scientiﬁc knowledge, becomes particularly acute in the study of complex,